Most pharmaceutical synthesis involve condensation or dehydration reactions at some point in the process that generates water as a by-product. This water must be removed since (1) water is often not a desirable component of the finished product, (2) water limits conversion to final product, and (3) water generated slows the reaction rate. Many Pharmaceuticals have thermal limitations and therefore removing the water by boiling it off is simply not attractive due to product degradation. Membrane reactors have been proposed for a number of pharmaceutical syntheses. To be competitive with conventional technologies, membrane reactors must be shown to have better selectivity, permeability and stability and ability to perform at lower temperatures. Compact Membrane Systems (CMS) has identified a novel product concept that represents a broad platform for utilization of membrane reactors in pharmaceutical synthesis. Preliminary economic and engineering analysis shows that removal of water will significantly increase yield (literature shows 33%) and therefore, lower reagent consumption. Further, the desired product downstream separation and purification can be dramatically simplified. Therefore, enhanced water removal reduces production costs in these ways: higher yield, faster reaction and purer product. This enhanced manufacturing process is consistent with the Federal Initiative on Broad Manufacturing Enhancements to strengthen the United States Competitive Position. While many systems can be used in Phase I to demonstrate the feasibility of the product concept, we will focus on an appropriate model system. In Phase I, we will first fabricate membrane reactor and then demonstrate enhanced performance. This will be followed by long term testing and economic analysis. CMS has established key industrial relationships with major membrane companies, material suppliers, chemical synthesis companies and key end users. These relationships will help CMS in successfully completing Phase I and II of this program and most importantly subsequent commercialization. Overall market opportunity is seen as very large related to broad pharmaceutical utilization in many synthesis. [unreadable] [unreadable] [unreadable]